Nonprofits Turn Focus to Housing Crisis

Image of hand holding a paper cutout of house with green foliage in the background

Nonprofit organizations exist to provide a benefit to local communities and the public, often associated with charitable, educational, religious or scientific intentions. As stakeholders and significant drivers of community development in their areas, nonprofit organizations have begun to hone in on housing shortages. Individuals and families are finding the ability to afford suitable housing more difficult than ever. Housing affordability is often interconnected to other community priorities impacting the quality of life, including education, food security, health care and poverty. Now is the time for nonprofit organizations to apply their passion, creativity and efforts toward resolving the housing crisis. Numerous success stories exist that can guide nonprofits in any community. 

Define “crisis”

Potential homeowners face an increasingly difficult path to accessing housing. As home prices and mortgage interest rates in 2023, homebuyers need about $115,000 to afford a median-priced home in the U.S., up nearly $30,000 from only three years prior. While affordability is on a stressful path, the current housing crisis is also defined by a housing shortage. Overall, the United States has a housing shortfall of approximately four million units as a reflection of a long-term decline in the construction of single-family homes and an even larger decrease in entry-level single-family or starter homes. 

Focus on solutions

Amidst the negative trends, there are numerous examples of nonprofit organizations attacking the housing crisis in their areas. One such example has occurred in Pierce County, Nebraska. The rural county has a median home price of approximately two-thirds of the national average, making first-time homeownership seemingly very attractive. However, it lacks sufficient workforce housing, with its rural nature leading to difficulty recruiting developers and attracting employers. Therefore, the local nonprofit Pierce County Economic Development (PCED) sought to create a project to increase the county’s supply of workforce housing. It obtained grant funding from Nebraska’s Rural Housing Trust Fund, designed to help nonprofit development organizations that administer workforce housing investment funds through projects intended to increase supply and reduce workforce housing costs.Grant funding paid for half the total project cost, with PCED contributing 50%. As a result, the developer, who would otherwise not have built in the community, constructed new workforce housing units and purchased and rehabilitated existing apartment units, making more housing available.

In Delaware, Habitat for Humanity of New Castle County employs its Almost Home Rent-to-Own Program to help renters move into homeownership quickly by improving their credit scores.

A Tiny Home for Good in Syracuse, NY, is a nonprofit organization that builds quality homes on vacant lots or renovates derelict properties to be rented to individuals facing homelessness. Each unit is designed for one individual, providing a safe, designated private space that allows them to become stronger community members, rely less on social service resources and maintain their independence. A similar program exists in several locations throughout the country with the Veterans Community Project, which helps veterans successfully transition to sustainable, long-term housing of their own. 

A similar housing crisis exists for senior living, and targeting increased supply for that market can help the overall housing crisis. Without senior-focused communities, the greater housing demand may experience strains as elderly residents compete for the same housing resources as other age groups. Developing suitable senior housing options will lead to a balanced and sustainable housing market that caters to the community’s diverse needs. Great River Energy is a not-for-profit wholesale electric power cooperative serving 27 member-owner distribution cooperatives that worked with two of its member cooperatives to facilitate senior housing projects in their communities. East Central Energy recently celebrated the groundbreaking of Boka Haven in North Branch, MN, a multimillion-dollar project to construct a new 24,000-square-foot, 40-unit senior living facility. Knute Nelson, a 501(c)(3) non-profit leader in senior housing and health care in Minnesota, broke ground recently on an addition to Crystal Brook Senior Living to establish a new 20-unit memory care household on its campus. Each project will open up housing for younger generations to move into the community.

Proven Process

Investing in strategic planning is an important step any nonprofit organization should take before addressing the housing crisis in its community. A housing study is essential to define a community’s supply by user, housing stock condition and affordability. The housing study can also determine the potential need for outside developers and what funding may be necessary.

Pursuing that funding can be a complicated and stressful task. A feasibility study can gain insight and involvement from key stakeholders through candid, confidential conversations to uncover opinions leading to potential funding sources. A well-thought-out feasibility study will engage and build consensus among community leaders that fundraising goals are realistic and attainable. 

Convergent Nonprofit Solutions has deep expertise in designing and managing feasibility studies that deliver successful large fundraising and capital campaigns while also providing valuable information to help guide other crucial organizational decisions. Our focus on thoroughly understanding a nonprofit organization’s role in any community enables us to combine our strategic planning and fundraising knowledge to help address housing shortages. Download this whitepaper on solving housing shortages, or contact us to learn how we can help your community achieve the success it is seeking today.

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